Tuesday, March 18, 2008

Free Is The New Currency

Jake Brewer over at The Realist Idealist wrote a post about a recent cover story in Wired Magazine by Chris Anderson entitled “Free! Why $0.00 Is the Future of Business.”

Brewer summarizes the article this way:

Though Andersen focuses almost entirely on the application of “free” for business (i.e. how Ryan Air can sell you a ticket for $20 and still make money, or how Comcast gives a DVR away, or how you can get a free cell phone, or…you get the idea), his underlying premise should theoretically extend beyond it. That premise: As an entity or commodity (eg bandwidth, storage, phones, processing power etc) goes digital it inherently moves ever closer toward being free.

And then he asks an interesting question: How does this concept apply to the social sector and global issues like hunger, homelessness, or HIV/AIDS?

It's a fascinating question - and one that's worth some discussion. The underlying element, in my opinion, is that free is the new currency in business because value flows from credibility. Since the internet has shifted credibility into the public, rather than the private, arena, establishing credibility now requires massive public exposure - which can only be done without charging for access.

An expert (Jeremiah Owyang is a great example) now establishes credibility in his/her field by giving away expertise in the open market. Once credibility is established, dollars follow from those who wish to consult privately with the guru.

For non-profit organizations, the question is how to similarly establish credibility in the public arena - and derive value from that credibility.

For example, if your non-profit could establish itself as the undisputed expert in the public arena for - say - distributing resources to the homeless, who else might find that expertise valuable? Couldn’t you offer that expertise to private buyers looking to do the same outside of your organization’s reach? NGOs and city governments pay consultants for those services now - why not pay your organization for its insights and advice?

When you're thinking through your organization's communications strategy, how much have you thought about the value of your experts and in-house expertise? Could they fit into the revenue model of your agency? What are you doing to link their market value to your own? How much freedom have you given them to establish credibility for your organization within their sphere of influence?

You might be surprised to find that by giving your expertise away for free, it suddenly becomes much more valuable.

No comments: